The Law Society of Scotland has issued guidance on cloud computing services, following “extensive consultation with law firms, in-house counsel and cloud providers”.

According to the regulator, the advance of such technology has made third party outsourcing of cloud services highly attractive to many businesses, including law firms, bringing benefits such as cost reduction, increased flexibility and in-built support and maintenance without the need for an in-house IT team.

Paul Motion, convener of the Society's Technology Committee, said: "This is a proactive step by the Law Society of Scotland and we believe it is the first legal regulatory body to issue guidance on cloud services. We hope the profession will appreciate the Law Society of Scotland's leadership and that the guidance will be useful to firms of all sizes.”

There are potential drawbacks to using such technology, which allows the user to store and process data and software via a third party provider and access it over the internet rather than on a firm’s internal computers or servers. The guidance published on 16 January, is intended to provide advice on the benefits and potential pitfalls of using cloud technology.

Paul Motion continued: "Many solicitors probably already use some form of cloud computing, for example Hotmail or Gmail and social networking sites, but it is important they analyse how they intend to use the system before choosing a supplier. Anyone considering using cloud technology systems should think about the importance of access to and security of client information to determine how stringent the pre-contract diligence and service legal agreement should be - think of your service level agreement as your insurance policy and be sure it meets your specific needs and ensure that security levels, equipment and connectivity are sufficient.”

Regulatory issues arise with third-party data storage because, with many cloud providers, data could be stored anywhere in the world at any time. The Data Protection Act 1998 prohibits the transfer of personal data to countries outside the European Economic Area (EEA ) that do not offer adequate data protection, so the society recommends that cloud computing providers store data within the EEA. That, according to the guidance, will ensure that data centres in 'high risk' countries are not subject to any local rules enforcing disclosure to any national authorities without the law firm’s knowledge.

Likewise, there are obligations on solicitors to disclose information to organisations like the society itself, the Scottish Legal Complaints Commission, HMRC, lenders or law enforcers. Any system adopted by solicitors should be accessible on demand to ensure they are compliant with such demands.

• The issues surrounding cloud computing are complex and have given rise to a whole area of expertise within the ranks of expert witnesses, both in terms of provision of services and service agreements and in terms of data storage and retrieval. The Expert Witness Directory of this site lists a number of specialist firms.